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Citigroup separates Mexico operations from Banamex, sell-off effort fails

Citigroup CEO Jane Fraser during an interview for the episode “The David Rubenstein Show: Peer-to-Peer Conversations” at the Economic Club of Washington, Washington, D.C., March 22, 2023.

Valerie Presh | Bloomberg | Getty Images

city ​​group announced Wednesday it plans to push for an initial public offering (IPO) of its Mexican business Banamex, ending a 16-month effort to find a buyer for the unit.

Citigroup said the bank plans to complete the separation in the second half of 2024, with a public offering likely in 2025. release. A listing has not yet been decided, but a dual listing in Mexico and the United States is possible, a person familiar with the plan told CNBC.

Citigroup shares fell 3% in early trading.

CEO Jane Fraser said, “After careful consideration, we believe that the best path to maximizing Banamex’s value for shareholders and advancing our goal of simplifying the company is to shift away from a dual-track approach to the business. We have come to the conclusion that we will only focus on our IPOs.”of release.

Since taking over in March 2021, Mr. Fraser has led an overhaul of the third-largest U.S. bank by assets. One of her first moves as CEO was dramatic reduction Among the Bank’s global hubs. Plans for sale or IPO of Banamex disclosed In January 2022.

things fall apart

Sales talks reportedly fell apart this week, despite attracting interest from multiple potential suitors.Citigroup was nearing a deal to sell most of Banamex to Grupo Mexico for about $7 billion, according to Bloomberg Said Early this month.

sales efforts complicated According to The Wall Street Journal, the Mexican president has demanded that Mexican art owned by workers and banks be protected in any transaction.

Citigroup bought Banamex for $12.5 billion in 2001, making it the only major US bank with a significant presence in Mexico. However, like many overseas retail sectors, this business has lost market share to locally owned competitors.

Banamex has 38,000 employees, 1,300 branches, more than 12 million retail customers and about 10 million pension customers, according to Citigroup.

Banamex will continue to be reported on Citigroup’s results until ownership falls below 50%, according to the New York-based bank. Citigroup will continue its institutional and private banking operations in Mexico, the bank said.

A silver lining for the bank is that it can resume a “moderate” level of buybacks this quarter. The company had put the buyback on hold as the sale was expected to affect the bank’s capital levels.

—CNBC Leslie Picker contributed to this report.

Summarize this content to 100 words Citigroup CEO Jane Fraser during an interview for the episode “The David Rubenstein Show: Peer-to-Peer Conversations” at the Economic Club of Washington, Washington, D.C., March 22, 2023.Valerie Presh | Bloomberg | Getty Imagescity ​​group announced Wednesday it plans to push for an initial public offering (IPO) of its Mexican business Banamex, ending a 16-month effort to find a buyer for the unit.Citigroup said the bank plans to complete the separation in the second half of 2024, with a public offering likely in 2025. release. A listing has not yet been decided, but a dual listing in Mexico and the United States is possible, a person familiar with the plan told CNBC.Citigroup shares fell 3% in early trading.CEO Jane Fraser said, “After careful consideration, we believe that the best path to maximizing Banamex’s value for shareholders and advancing our goal of simplifying the company is to shift away from a dual-track approach to the business. We have come to the conclusion that we will only focus on our IPOs.”of release.Since taking over in March 2021, Mr. Fraser has led an overhaul of the third-largest U.S. bank by assets. One of her first moves as CEO was dramatic reduction Among the Bank’s global hubs. Plans for sale or IPO of Banamex disclosed In January 2022.things fall apartSales talks reportedly fell apart this week, despite attracting interest from multiple potential suitors.Citigroup was nearing a deal to sell most of Banamex to Grupo Mexico for about $7 billion, according to Bloomberg Said Early this month.sales efforts complicated According to The Wall Street Journal, the Mexican president has demanded that Mexican art owned by workers and banks be protected in any transaction.Citigroup bought Banamex for $12.5 billion in 2001, making it the only major US bank with a significant presence in Mexico. However, like many overseas retail sectors, this business has lost market share to locally owned competitors.Banamex has 38,000 employees, 1,300 branches, more than 12 million retail customers and about 10 million pension customers, according to Citigroup.Banamex will continue to be reported on Citigroup’s results until ownership falls below 50%, according to the New York-based bank. Citigroup will continue its institutional and private banking operations in Mexico, the bank said.A silver lining for the bank is that it can resume a “moderate” level of buybacks this quarter. The company had put the buyback on hold as the sale was expected to affect the bank’s capital levels.—CNBC Leslie Picker contributed to this report.
https://www.cnbc.com/2023/05/24/citigroup-to-spin-off-its-mexico-business-through-ipo.html Citigroup separates Mexico operations from Banamex, sell-off effort fails

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